Reader: NIS should invest in Barbados Four Seasons project

Lest we forget some of the reasons for this project…

Submitted by BFP reader WL

Me thinks that people have perhaps become a little too bogged down in the trees of politics and grandstanding and everyone is tired from looking at this too long to see the forest – hopefully this might refresh people’s memories of why this journey began in the first place.

Why has the project taken so long to restart?
Why should the NIS invest?
Why would the Four Seasons project be good for Barbados?
Why does Barbados need Four Seasons?

Did you know…?

1.        Four Seasons predict that this will be one of their premier resorts – great kudos to Barbados

2.       Four Seasons themselves are investing in the project as a sign of their belief in the project and Barbados – they usually never invest in the development stages of resorts.

3.       In the US alone in 2011, over $137 billion was spent on travel  and one of the fastest areas of recovery in this sector is luxury travel so the sooner the Four Seasons project is up and running, the sooner Barbados will be able to tap into this market.

4.       The new company, Paradise Beach Limited have put into place the following social initiatives

a.       Work experience with UWI students
i.      Selected students taking the UWI masters course in construction have the opportunity to work with some of the top staff at PBL. These people have MBAs from international universities, have worked on globally recognised projects etc. again this is a phenomenal opportunity to tap into excellent, one-off resources

1.       This is actually taking place

b.      Skills transfer/Apprenticeship scheme
i.      For pieces of work such as mechanical or electrical where there is a skill shortage on the island, if foreign companies are brought in then Paradise Beach have been talking to the government about an apprenticeship scheme so that in future Barbadians WILL have the necessary skills plus they will have actual experience having worked on one of the world’s top resorts

c.       Giving back to the community – once construction starts the consultants, contractors and the staff of PBL have agreed that they will put back into the community through volunteer work – this may be in the form of painting an orphanage or building a playground. This social initiative was something that had to be included as part of tender bids.

5.       The new management team worked without pay for over a year to get the project restarted and local creditors repaid

Why has the project taken so long to restart?

1.       The IDB (Inter American Development Bank – the world’s largest development bank) has agreed to a US$90 million loan for the project – this money only comes after extensive audits and reports looking at everything from commercial viability, projected employment on the island, impact on the sea and wildlife, eco-friendly initiatives, developmental impact etc. They would not have agreed to the loan if they did not think this was both good for Barbados and the region and a financially sound project

a.       http://en.wikipedia.org/wiki/Inter-American_Development_Bank
b.      http://www.iadb.org/en/inter-american-development-bank,2837.html
c.       http://www.bnamericas.com/news/banking/capitalization-plan-to-allow-idb-to-lend-us12bn-annually-through-2022

2.       The IDB also requested a report on the effect the project and completed hotel and villas would have on Small to Medium size businesses on the island. The potential trickle down was valued in the millions – from housekeepers to landscaping to local produce, entertainment, restaurants etc.

3.       THE IDB and NIS have undertaken extensive due diligence to make sure that the risks are mitigated and the terms of investment as favourable as possible

a.       To achieve this independent lawyers, accountants, engineers, surveyors and real estate specialists were appointed

4.       Ensuring that the Barbadian workforce benefited from the project closed many investment doors. If Barbados would accept 1000 Chinese workers on site and no Bajans then there are definitely alternative investors

Why should the NIS invest?

1.       One of the primary reasons that Paradise Beach Limited (PBL) have been looking at local investment is because they want to keep the money within Barbados and the Caribbean. How many large companies etc come here and then take the money and profits out of Barbados – by keeping the investment regionally local it will keep the money within the greater Caribbean economy

a.       International Investors who were looking to invest in the project wanted concessions for 100% expatriate workforce during both construction and operation!

2.       Barbados needs foreign currency – at the moment it’s foreign exchange reserves are in difficulty and since Barbados imports so many items it needs the forex to pay for these items

3.       An IMF report that came out recently regarding NIS investment stated that the NIS continuing to invest in low yielding government bonds was not a good idea. In fact the IMF approved of the NIS investing in the Four Season’s project

a.       “The IMF has not frowned upon the Four Seasons investment by the NIS, quite the opposite. The IMF is recommending the NIS diversify its assets more. Everyone would consider placing less than 2.0% of NIS investments in an investment that earns its returns from well-to-do tourists, not local tax-payers, is backed by the IDB – the world’s largest development bank – and Four Seasons –  the number one hotel brand- and vetted by independent experts, as prudent diversification”

b.      http://www.imf.org/

4.       Additionally given both the restrictions on what the NIS can invest in and what is available for it to invest in – an investment in the Four Seasons project is probably one of the best things it can do. It can either continue to invest in low yielding government bonds and hope that tax revenues increase to pay them back or face default like Greece or based on recommendations from the IDB, Four Seasons, the IMF and one of the world’s leading economic brains – invest in the Four Seasons project.

a.       The NIS needs to diversify away from government paper which can only be repaid by increased future taxes

b.      There is great safety in investing with the world’s largest development bank and one of the world’s leading luxury hotel brands
i.      http://www.tophotels.com/full-text-search/searchterm-Four+Seasons-1.html
ii.      http://www.fivestaralliance.com/best-hotels/luxury-family-hotels
c.       The project ensures strategic support of the Barbados tourism sector

d.      The project helps to underpin pricing of other West coast development projects

Why would the Four Seasons project be good for Barbados?

1.       At the height of construction over 1000 people will be employed

2.       Once the hotel and villas are open there is potentially employment for 300 people

3.       There are great opportunities for local and regional companies to showcase themselves to both some of the wealthiest people in the world but also to one of the top companies in the world

a.       Imagine if you were a local artist and Simon Cowell decided to put some of your art in his villa?

b.      Imagine if you produced local jams and marmalades and Four Seasons provided them with their breakfasts?

c.       Four Seasons actively tried to promote local talent and produce – http://www.amazon.com/Four-Seasons-Story-Business-Philosophy/dp/1591842441/ref=ntt_at_ep_dpt_1

4.       Four Seasons are also excellent employers and both train and value their staff more so than the majority of other similar companies. The opportunities for Barbadians to learn valuable skills and travel within Four Seasons to other hotels and resorts are immense.

5.       Tourism on the island will benefit as a whole as 5 star skills are transferred to other hotels and restaurants over time.

Why does Barbados need Four Seasons?

1.       Many visitors over the last 40 years have been repeat guests. Modern travellers do not often tend to visit the same location year after year which means that Barbados needs to reinvent itself or it will start to lose its competitive advantage

2.       Barbados needs to attract a more diversified tourist from further afield than just the UK. Four Seasons provides global recognition and attracts guests from North America, Russia and further afield.

3.       The Four Season’s brand is critical to selling the residential units. They have continued elsewhere, to sell Four Seasons branded residences through the recession. The type of person interested in buying this type of residential villa is interested to a large extent in the quality and services that the Four Season’s name promises.

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13 Comments

Filed under Barbados, Barbados Tourism, Economy, Offshore Investments

13 responses to “Reader: NIS should invest in Barbados Four Seasons project

  1. spiked rum

    lets hope the right contractors / subcontractors are selected this time.( not just ex associates of senior management and major shareholders !)

  2. Responder

    There goes my pension and a whole lot of common sense with it. PLEASE.

  3. Optimistic Citizen

    If the information supplied is accurate one has to ask the question, Why all the long talk? Just let it be done and give the economy the much needed capital injection. I wish the Government of Barbados all the best in the project.

  4. NYC/BGI

    Who is going to stay there? most of the hotels are suffering low occupancy and its a shame that the BTA thinks that it will make a difference. Once slots are available then maybe .

  5. Wily Coyote

    Fundamental Question;
    Why did the private investors STOP WORK on the development. The question is quite simple, it was determined that the project in it’s present form and world economic climate was not feasible from a financial stand point.
    When private investors, that fund the majority of the worlds capital development, determine a project is not viable, the likes of Barbados Politicians should pay attention and learn some fundamentals from prudent investors. Barbados is so self centered that it always has trouble seeing the forest for the trees. If The Four Seasons project proceeds in this economic climate, it will make the Government of Barbados GEMS financial fiasco look like child’s play and has the potential to put every Barbadian citizen into debt and financial hardship for years to come.

    Let the project DIE.

  6. NYC/BGI

    I agree the entire Carribean is suffering from the cruise lines of providing a economic bargain based on well scripted tourism playbook. in fact cruise ships no longer come to BGI as before because of the outrageous prices charged to the cruise visitors. St Thomas has adapted for years and their underground economy is thriving. and BGI is now without the number of cruise arrivals it had in the past.

  7. Okay I'll bite

    The devil is in the details

    1) How much is the total price of the construction, soft and hard costs?
    2) How many pre sales with non refundable deposits and the total?
    3) How much is Four Seasons putting in the investment and by what means
    ie. cash pro rata basis, reduction of management fees etc?
    4) Who is lending, in what order and how does the repayment schedule look?

    WL This is somewhat of a superficial good feel gloss over

    a little more information would be a good learning tool

    The absence of that information does not allow NIS contributors to really know what is going on.

    Thats what transparency is all about.

  8. NYC/BGI

    What are you nuts? it will be a failed project? Years ago Micheal herring sold Glitter Bay and opened the now 4 seasons in St Thomas. its a financial success. the reality of the issue is that there is enough tourism traffic from the US and San Juan. not the same in BGI if the hotels currently have low occupancy and the government owned Hilton is one of the newer properties and doing fair. Sad to say another marginal investment. Take a look at the failed hotels currently on the island and that is your answer. . .j

  9. Newbie

    PLEASE TELL THE NIS TO PUT MY CONTRIBUTION AWAY IN A SAFE SOMEWHERE AND DO NOT LEND THEM MY MONEY, THANK YOU!!!

    GOOD FOR A LAUGH??
    a. Imagine if you were a local artist and Simon Cowell decided to put some of your art in his villa?
    Simon Cowell can do this WITHOUT FOUR SEASONS. HE NO DOUBT OWN OTHER RESIDENCES AND WE HAVE MANY LOCAL ARTISTS!!!

    4. ” Ensuring that the Barbadian workforce benefited from the project closed many investment doors. If Barbados would accept 1000 Chinese workers on site and no Bajans then there are definitely alternative investors”.
    SO THEY WOULD INVEST IF NO BAJANS WERE EMPLOYED!!

    a. “International Investors who were looking to invest in the project wanted concessions for 100% expatriate workforce during both construction and operation!”
    SO THEY WOULD INVEST IF NO BAJANS WERE EMPLOYED!!

    c. Four Seasons actively tried to promote local talent and produce
    THEN AT LEAST THEY SHOULD BE HAPPY WITH A BAJAN WORKFORCE!!

    1. At the height of construction over 1000 people will be employed.
    AS LONG AS THEY ARE ALL CHINESE!!

    2. Once the hotel and villas are open there is potentially employment for 300 people.
    AS LONG AS THEY ARE ALL CHINESE!!

    d. The project helps to underpin pricing of other West coast development projects.
    HOW DOES A STALLED, IN TROUBLE PROJECT MANAGE TO DO THAT??

    2. Barbados needs to attract a more diversified tourist from further afield than just the UK. Four Seasons provides global recognition and attracts guests from North America, Russia and further afield.
    APPARENTLY AT PRESENT A WHOLE ISLAND CAN’T DO THIS FOR ITSELF BUT ONE (brand name) HOTEL PARKED ON IT WILL DO THE JOB, okay then.

    1. Many visitors over the last 40 years have been repeat guests. Modern travellers do not often tend to visit the same location year after year which means that Barbados needs to reinvent itself or it will start to lose its competitive advantage

    what is your point here??
    THESE VILLAS ARE FOR SALE, WILL THE OWNERS NOT COME BACK YEAR AFTER YEAR (are they not modern travellers, i don’t get it) OR AM I TO TAKE IT THAT THE PROJECT WILL BE MOVED TO A NEW LOCATION (on the island) EVERY YEAR TO ENTICE REPEAT CUSTOM (definitely don’t get it)??

    b. Skills transfer/Apprenticeship scheme
    i. For pieces of work such as mechanical or electrical where there is a skill shortage on the island, if foreign companies are brought in then Paradise Beach have been talking to the government about an apprenticeship scheme so that in future Barbadians WILL have the necessary skills plus they will have actual experience having worked on one of the world’s top resorts.
    CAN YOU IMAGINE, IF WE EVER DEVELOPED SUCH SKILLS WHAT A WORLD SUPER POWER WE WILL BECOME.

    BIGGEST LOAD OF PADDED OUT BULLSHIT I HAVE EVER READ.

  10. NYC/BGI

    Hooray for you BGI needs to wake up curb the crime as well and remove the cops that are in cahoots with the thugs that were deported from the US and are criminals. police dept is an embarrassment proper BS personified. even is they watched any of the CSI programs they would be able to at least see how crime is dealt with.

  11. Newbie:
    Well said!
    If it wasn’t so tragic it would be funny.
    UWI students working with people with international MBAs? Seriously?! That is a ‘benefit’ of this project?!?!
    The skills shortage argument is equally ridiculous, Barbados has an established construction sector, a university, polytechnic plus additional institutions in the region so I don’t think we need a 4 Seasons project to train or people in electrical or mechanical work.

    This investment seems too risky in the current climate for national insurance money. If there was a guarantee these villas would sell and the hotel would be full they would be beating off investors. Why are so many other development projects stalled in the island? Is that not a sign that the market is depressed?

    And pray tell, why did the prospect of employing Bajans this project close many doors? If that is truly the case we have bigger problems than a stalled 4 seasons project.

    There may be a lot of ‘grandstanding’ about and why not? When one is insisting of using people’s NIS money like a piggy bank for pet projects what do you expect? If this is such a fabulous investment why aren’t the said Russians and Americans this resort will attract cashing in? Are we really meant to believe that with all the luxury property already available on this island that the money-bags are staying away because there is no 4seasons!?!

  12. Sunshine Sunny Shine

    I want to ask a stupid question. The money in the NIS belongs to who? And should not that ‘Who’ decide how they want there money invested? The decision makers contribute to the NIS as well but how come only them could decide and not the majority to whom the 60 million belong too. There should have been a referendum.

  13. NYC/BGI

    The only way BGI/ Paradise Beach will be a success is to build a resort which rivals Sun City or Atlantis. where they include and train local legal residents as permanent full time employees. Mile Pemberson knows how to run a hotel Glitter bay and La Plazio in St Thomas that turned into a 4 seasons. There should be some kind of mandate effecting such. its still a economic question because of the global economy and the dearth of other hotels doing poolly.. The only way ot will be a sucess is if gambling comes to BGI. remember Mike Pemberton owned a Casino in the UK. Wake up BGI and insure you know all the facts as well as cost expectations.. .